Posts about newbiznews

I just saw some mind-bending work Chartbeat is about to release about measuring the time users spend exposed to an ad online.

As background, to quote Chartbeat CEO Tony Haile: “Chartbeat monitors activity by checking in with users every second and looking for signals (mouse movement, key strokes, etc) that show they are actively consuming the content in front of them. This means they can measure how long readers spend actively engaged on a page and what parts they’re reading. Because of this Chartbeat knows how long are actively reading while an ad is in view — both for an average user and the cumulative time of all users.” Chartbeat then did some internal research that found high correlation between engaged time exposed and a user’s ability to recall the advertiser’s brand and message. This has many implications:

* Measured this way, ads that appear down alongside the middle of a story turn out to be more valuable than the supposedly premium banners at the top of the page. That’s because people quickly scroll past those banners and all the big hair on the top of the page — logos, promos, and all that — to get to the substance of an article, where they spend time. So inventory that was undervalued becomes more valuable.

* Chartbeat suggests this means that quality content that engages people longer yields better ad performance. That, they say, would be a good thing for better content makers everywhere.

* Now web publishers can sell time like broadcasters — only this is assured exposure time. Advertisers like buying time. Will this make them more comfortable with buying on the web?

* I think this enables publishers to take on some risk for advertisers — guaranteeing them assured exposure time — thus increasing the value of what they sell.

* I wonder whether this spells trouble for the big-ass ads and takeovers we users try to escape as quickly as possible.

* I also wonder whether this spells trouble for the slideshows and other gimmicks that pump page views without increasing time spent exposed to an ad.

* I’d like to think this opens opportunities to find new value in ads next to videos and games and also — this could be important — mobile pages (though don’t think that mobile’s value will come from exposure to messaging; it will still come from knowing people and serving them relevance and value). The longer we spend on a page, the longer we see the ad, the more valuable the ad should be, right?

* I can only hope that this is another nail in the coffin of the dangerous, old-media-like metrics of unique users and pageviews. Engagement will matter more.

A sample report on an ad location:

Those who declare advertising dead are Mark-Twaining-it, I think. There are still many things to learn to find more effectiveness and value in advertising online. This is just one lesson. I say the real value of the net and mobile is in relationships: in learning more about people by delivering them more value so we can be trusted to deliver them greater relevance and value and, in turn, extract greater value from the interaction. More on that later….

Brands (read: advertisers) are following media down the wrong path, deciding that they, too, are media now and that they, too, should make content to draw customers to their messages (thereby, by the way, getting rid of that middleman, media).

I’ve been arguing that media should build their futures around relationships, using content as a tool to that end. I’d say that is even more true of brands.

Yesterday, Samir Arora, CEO of Glam (where — full disclosure — I’ve been an adviser), tweeted a link to Marc Andreessen arguing that Ning, the company he cofounded and sold to Glam, is about to come into its own as it is remade for brands. That got me thinking about brands’ direction.

Whatever platform they use — Ning, Facebook, Google+, Twitter, blogs or all of the above — is less the issue than the culture that enables its brands and its employees — every one — to talk with and build relationships of value and trust with customers.

We’ve all seen this happen on Twitter when we get pissed off at some unfair or unrighteous action by a company; we appeal to sanity; an employee — sometimes the official tweeter, sometimes just a decent soul — rescues us; our relationship with the company is redeemed.

That is the model for brands online. I thought we’d learned that years go. Apparently not quite. Today not only are brands making content in their own domains but they now want to make content in media’s space; we used to call that an advertorial but now that is apparently called — in jargon that appeared from nowhere — “native advertising.” WTF does that mean?

Mind you, brands should indeed create content and make it available — about their products so we can find every question we have answered. But that’s utility. That’s not what brands talk about when they become media. They make this:

Huh? How is that really any different from slapping a banner onto content? Oh, yes, it’s supposed to make us associate the Droid Razr Maxx HD with exotic locales and long battery life. But Motorola would do better to finally produce a decent phone, in which case, we the users would advertise it. I do hope that’s a lesson Google teaches them. Google understands the value of building relationships with individuals and using knowledge about them to deliver relevance and value. Isn’t that the wise future of media … and marketing?

Another hyperlocal venture is struggling, and each time this happens, I fear hyperlocal gets more cooties. But I refuse to give up hope because there’s a reason for each fall, there’s much still to do, and it’s still early.

The latest: Carll Tucker’s Daily Voice (née Main Street Connect) closed 11 of its sites, lost its CEO and other executives, shut some offices, and fired a bunch of people to cut its burn from $500k to $150k per month, according to Street Fight.

In hyperlocaland, Tucker was known to be particularly cocksure, saying he had the secret and — in the surest sign of hubris — raising large amounts from investors. Some smirk at his fall. But if he can now survive, then I’ll celebrate.

Tucker’s mistake, like Patch’s, I believe, was in thinking too big too fast. Before they nailed the business and knew what worked, they multiplied the model and thus the mistakes, which only threw accelerant on their burns. Perhaps they also thought too big. I’m not sure hyperlocal can be big — that it can scale, in the argot and desire of investors. More on that in a minute.

But first, in other cootie news: Patch recently cut staff and I’ll argue as I long have that they are creating closed sites when they should be building open (and more efficient) networks. NBC* closed Everyblock, though I was never sure why it fit there. Village Soup died, and I would still like to know more about its specifics. TBD was murdered before it ever had a chance to live thanks to parental politics. Add these to earlier cootied corpses: The Chicago News Cooperative had neither a business model nor cash from donors. Bayosphere failed sometime ago and I think its founder Dan Gillmor would acknowledge a lack of a business model. It was sold to Backfence, and its founder, Mark Potts, has very generously shared his lessons learned. There’s a reason behind each one of these.

At the same time, there are hyperlocal sites that are proving to be sustainable. Unfortunately, it’s pretty much the same list we’ve had for sometime: Baristanet, West Seattle Blog, NJ’s TheAlternativePress, Red Bank Green…. We analyzed these blogs a few years ago at the Tow-Knight Center for Entrepreneurial Journalism at CUNY, and found local blogs that then were able to bring in upwards of $250k in ad and other revenue.

There’s something that ties the survivors together:
1. They are small.
2. They are the products of a great deal of hard work by very dedicated journalists/publishers.
3. They are very much a part of their communities (which makes it difficult to parachute in any kid just out of J-school, I’m afraid).

Hyperlocal is going to be built this way, a town or city neighborhood at a time, I think. Are there enough dedicated journalists willing to do this hard work and to risk and sacrifice better paying alternatives (read: PR or flipping burgers, for that matter) and to learn how to do culturally distasteful things for journalists like sell ads and do business? In New Jersey alone, we have 565 towns and given this state, each is an opportunity ripe for corruption that needs to be covered. Even if we say that one hyperlocal site could cover three towns (some are small), that’s still more than 150 bloggers needed. I’d say we have a bit more than a dozen in the state now. Is it reasonable to think we could get 10+ times more? No. But I’d be ecstatic three three or four or fives times more.

I think we see a model for what’s possible in blog-rich Brooklyn, where there are scores of local blogs. CUNY runs The Local there, now solo, after The New York Times pulled out of its hyperlocal endeavors (another cootie). One of my entrepreneurial students is on the way to starting what I think will be a great service there (more bragging about him when he’s ready). It is possible. But they all need help.

This is why I worked with Montclair State and the Dodge Foundation (where — disclosure — I’m an advisor) to help start the NJ News Commons in New Jersey. My hope — OK, call it a dream — is that it and others (like NJ.com, which — disclosure — I helped start and where I’m now an advisor) can help make it feasible for an unemployed journalist — and we have lots of them — or a caring community member to start a site to serve a community bound by geography or interest. Among the things the Commons will do to help:
1. Aggregate, curate, promote, and distribute the best of the content created by independent members of the New Jersey news ecosystem. Debbie Galant has started a content sharing network enabled by Repost.US.
2. Train local publishers in the skills they need: new media, journalism, and especially business. That’s just beginning.
3. Coordinate collaborative projects so the independent members of the ecosystem can do together more than any one can do apart. That is beginning and I think it will grow with coverage of Hurricane Sandy recovery, which will be helped along with grants coordinated by Dodge and the NJ Community Foundation.
4. Provide services, which we hope may include everything from health and libel insurance to technology platforms to make it easier for sites to start with less effort and risk.

All that is well and good but it doesn’t address the key question, the only question of hyperlocal: revenue. This is where commercial endeavors must enter. In our modeling at CUNY, we saw the need for this work in revenue:
1. Better ad sales by hyperlocal sites serving merchants with more than just banners but also helping them with their digital presences. At CUNY, we looked at the digital lives of 1,000 merchants in a city neighborhood and a suburban town and saw great opportunity to help them. I don’t expect every hyperlocal publisher to innovate this. They need help. But I see big business opportunity here for entrepreneurs (or Patch).
2. Ad networks that aggregate audience from independent sites so they can for the first time get a piece of revenue from larger advertisers. This is likely something that needs to be done by a larger local media company (e.g., a newspaper or broadcast outlet).
3. Explore new revenue opportunities, such as events and newsletters. We are sharing lessons from sites that have found these to be surprisingly successful.

Still, this is hard work. It’s guerrilla warfare, a hill at a time. And that gets us back to the question of scale and one more need: funding. Hyperlocal ventures are caught in a terrible chicken-egg omelette. Funders will back ventures only if they scale, if they’re bigger than one town. Promising scale is how Daily Voice, Patch, Backfence, Everyblock, and other local ventures got funding. Striving for scale is what made them each perhaps grow too far too fast. Maybe the truth is that hyperlocal won’t scale. One entity won’t own thousands of towns and their sites because the successful site is very much a part of the community. OK, but each of those small ventures still needs funding to at least cover loses until an audience and a set of advertisers can be served. Where will that money come from? Journalists aren’t rich — especially now — and don’t have rich friends and family.

The more we can create the hyperlocal-site-in-a-box for would-be local entrepreneurs, the better — giving them membership in larger revenue networks, methodology, technology, and services like insurance. That will lessen the start-up cost and the risk. But they’ll still likely need some money to get them started.

This is where I believe that local patrons, local media companies, and especially foundations should be putting their resources: not into supporting journalistic charities or into building yet more gee-whiz cool tools but into helping to start sustainable journalistic enterprises with grants or convertible loans. Some will be gifts. Some will be investments — not big, scalable, exit-strategy, Silicon-Valley, technology platform investments but investments the size of a bakery. We need more bakeries for news.

When it comes to the information needs of communities, I’m less concerned about national coverage — Washington will always be overpopulated by scribes and cable will overcover disasters — and more concerned about local, especially the very local. That is where I hope we turn our attention. I also hope we do not get discouraged by the occasional cooties.

* Note: I changed the reference to Everyblock from MSNBC to NBC at the suggestion of Everyblock founder Adrian Holovaty.

Two important but too-unsung women in media — performer Amanda Palmer and Google ad exec Susan Wojcicki — met at an idea this week: that media and advertising are becoming voluntary.

They also touch on ideas I’ve been trying to write about: that media should be in the relationship business, not just the content business. In other words, media’s value isn’t necessarily intrinsic in content — as in, “you should pay for this product because the work to create it has value” — but can be realized in the relationships that form around content.

First, the amazing Amanda: She gave a rousingly received TED talk that has been seen almost half a million times already in which she argues that artists should not be afraid to ask for support, a lesson she learned as a street and stage performer and on Kickstarter. The nut of it via BoingBoing: “By asking people, you connect with them, and by connecting with them, they want to help you. ‘When we really see each other, we want to help each other. People have been obsessed with the wrong question, which is, How do we make people pay for music? What if we started asking, How do we let people pay for music?'”

Value comes to Amanda through relationships. Given the opportunity, people want to support her. In a very good post today, Reuters’ Felix Salmon contrasts her model with Andrew Sullivan’s. His purposefully mimics big media’s — from The New York Times to The Times of London: building a pay wall around content because content is valuable, damnit.

I’ve been arguing to media that relationships are more valuable. Knowing people because you have their trust and give them value builds a rich and deep relationship — builds data about that relationship — that can be far more valuable for far longer than a mere transaction.

The problem in media is that we are not built for that. We are built to serve the masses. Hell, we made the masses. Our manufacturing and investment and technology and business models have all been aimed at serving people in bulk, never as individuals because that wouldn’t scale, not in the age of presses and broadcast towers.

But now relationships do scale. See: Google. Now serving individuals scales even better and is even more valuable than mass media. Enter Susan Wojcicki, senior VP of advertising at Google, who wrote an important post on Google+ about the future of advertising. The nut of it: “In years to come, most ad views will effectively become voluntary.” Or as she also put it, choice shifts to the user in both content and advertising.

Just as it becomes difficult — in an abundance-based media world — to force people to pay for content, which is no longer scarce, it also becomes impossible to force them to see advertising, which may become more scarce (and perhaps more valuable). That means it won’t be advertising. It will be something no one — including Google — has invented yet. But Wojcicki’s thinking about what that can be. I’d bet on her finding it over a legacy media company just as I’d bet on Palmer finding a new model faster than a record company can.

The argument about paywalls — and copyright and the value of content — is the wrong argument. It’s an argument about trying to preserve old, industrial media model in a very different technological reality. I get accused of trying to kill paywalls or free content. I’m not. I’m just arguing that we need to recognize new opportunities because if we don’t, someone else will. Read: Google. Read: a street performer.

The discussion we should be having is how better to build valuable relationships of trust with people as people, not masses, and then how to exploit that value to support the work they want us to do. We can’t force them to do what we want anymore. For now, media are voluntary.

The Guardian asked for my take on the death of The Daily. Here it is (with links that fell out on the way to London):

On Twitter, I’ve already been accused of schadenfreude over the death of News Corp.’s soon-to-die, pay-walled, tablet-only, once-a-day news venture called The Daily.

Not so. I’d have loved to have seen an online-only news service make it. But The Daily was, in my view, doomed from the start because of all the adjectival modifiers listed above.

First, the pay wall: News Corp. proprietor Rupert Murdoch has elevated charging for content to a religion. He says people should pay for his products (though I’ve never seen a successful business plan in a competitive market built on the verb “should”). He turned his Times from an internet presence of note into a footnote because he insisted upon putting it behind a wall.

With The Daily, Murdoch wanted to prove that he could start and we would buy a news product online. But he forgot a key lesson of selling subscriptions, one he surely learned when he owned magazines: that it takes a lot of marketing expense to acquire customers. It costs money to charge money.

When it started, I calculated that The Daily would need to net at least 750,000 subscriptions — 1 million when accounting for cancellations (aka “churn”) — to break even on an operating basis, what with a share of sales going to Apple on the iPad. Murdoch promised he would sell “millions.” In the end, it reached 100,000 subscribers, not nearly enough to compensate for a reported $30 million in development cost and $500,000 per week burn rate.

Mind you, I am not against charging for content. I will happily sell you my books. But The Daily wasn’t much worth paying for. Though it looked quite nice and its content was competent, that content was all-in-all just news and news is a commodity available for free in many other places. Larry Kramer, publisher of the much-larger USA Today, just said with admirable candor that he can’t put up a pay wall online because his product “isn’t unique enough.” Ditto The Daily.

Next, The Daily started as an iPad-only offering. Eventually, it branched out to the iPhone and to Android tablets (but only for Verizon telephone customers) and the Kindle. I hope that other publishers learn from this misguided “mobile” strategy. Too many have dreamed that the tablet would return to them the control over brand, experience, and business model that the web and its links took from them. Too many think they need to create new products just for so-called mobile devices (though we actually often use them when stationary, at desk or on couch).

No, a news organization should have a strategy built around relationships with individuals, serving them wherever, whenever, and on whatever platform they like. My needs don’t change just because the device in my hands does.

Finally, there was the absolutely befuddling decision to make The Daily daily. News was only ever daily because it was forced into that limitation by the means of production and distribution of print. The internet freed us from those shackles of time. Why put them on again? Nostalgia?

In the breakup of News Corp. that is the real outcome of the London news scandals and the Leveson inquiry, the new company had to start cleaning up its books, getting rid of money-losing ventures. The Daily was the first to go. But there are more in that stable, starting with the New York Post, which loses, by one account, $110 million a year just to give Murdoch what he has long called his “bully pulpit.” Now he has a bully pulpit with almost four times more subscribers for free on Twitter. Can The Post’s obit be far behind?

I want to see news organizations grow again. But first, they must finish shrinking. They must decide what they can afford to be.

That is what is happening with Advance reducing publication schedules and resources in New Orleans and other of its markets. That is what happening with Journal Register as it declares bankruptcy to restructure its liabilities given present reality. I recommend you read Josh Benton’s and Rick Edmonds’ analyses of this latest business move.

Now please take what I say here not just with a grain of salt but with a salt lick as I advise both Journal Register and Advance, where I also worked for a dozen years. I was not part of these decisions. But I support them because I want to see newspaper companies find their water level of sustainability so they can again invest in the future.

Of course, there is not one answer to the question of what they can afford. In his statement on Journal Register’s move, CEO John Paton said that legacy costs undertaken under different circumstances are now unsustainable. Bankruptcy presents an opportunity to renegotiate many of those costs, including leases, contracts, and pensions.

These are hard decisions with difficult consequences for many people. But not addressing the issue will only turn out worse, squandering dollars every day the tough decisions are put off.

After too many years in denial, we all know now that newspapers, no longer monopolies and having lost their pricing power in the face of abundant competition, must be smaller if they have any hope to survive; there is no magic bullet that will set things “right” and return the business to what it was. They must find new efficiencies through consolidation (see Digital First’s Project Thunderdome and other companies bringing together shared work), collaboration (with the community and a larger news ecosystem), and specialization (do what you do best — in the case of local newspapers, that is being local — and link to the rest). They must reconsider their business models, looking for new opportunities, and also their relationships with the public.

I do believe that newspapers, rethought, can be sustainable — that is, profitable. The first step is to make hard financial decisions such as the ones discussed here. The next is to make the transition to digital, to put digital first, to become sustainable digital enterprises.

But all that gets us is survival. Then comes the real work: rethinking what a newspaper is, what its relationship with its community can be, where it adds value and how it may then — and only then — extract value. That is why I also spend my time trying to challenge assumptions about the forms, relationships, and models of news, asking unpopular questions such as whether we should even consider ourselves a content business. That is why I teach entrepreneurial journalism: to empower students to start new businesses based on new visions without the drag of legacy assumptions and obligations. But I do believe that newspaper companies can also find their sustainable future. That’s why I work with them as well. I want to see them survive and once again prosper, innovate, and grow.

I challenge every journalist in Tampa for the Republican convention — every one of the 15-16,000 of you — to answer this:
* Why are you there?
* What will we learn from you?
* What actual reporting can you possibly do that delivers anything of value more than the infomercial — light on the info, heavy on the ‘mercial — that the conventions have become?
* Would you be better off back at home covering voters and their issues?
* Can we in the strapped news business afford this luxury?

Figure that those 15k journos spend $300 a night each on a hotel room times five nights, plus $500 for transportion. That’s $2,000. And I’m figuring they’ll be slurping up free meals and drinks. So $2,000 is probably (pardon me) conservative. That’s $30,000,000. Now multiply that times two conventions. That’s $60,000,000.

Why? For what?

Note that even while newspapers and news organizations have shrunken drastically, we are sending the same number of journalists to the conventions that we sent in 2008 and 2004.

Why? Editorial ego: It’s fun to be there, in the pack. It’s fun for a paper or station to say, “We have our man/woman in Tampa/Charlotte.” Well goody for you.

It’s a waste.

Take that $60,000,000 and divide it by a fully loaded labor cost of, say, $100,000 per head and it would pay for 600 reporters for a year. At $50,000 for a hyperlocal reporter, we’d get 1,200 towns covered — more than Patch! What could they do versus what you will do in Tampa and Charlotte transcribing marketing messages and horrid memes?

At least 3,775 newspaper jobs were lost last year; 39,806 since mid-2007; one in three newsroom jobs have been eliminated since 1989. How’s that make you feel, convention press corps?

We can see whatever we want to see on C-SPAN (and I don’t begrudge the networks for giving us America’s Got Talent instead of the conventions since at least AGT has surprises; the conventions are scripted).

Commentary? There’ll be more than we can possibly use this year on Twitter and Google+ and blogs and everywhere. We don’t need to pundits’ palaver. Citizens will comment this year.

So enjoy yourself, hacks. You’re living off the last dollars of your business. And for what? Tradition? Where has that gotten us?

Please prove me wrong. In a week, show me the amazing reporting we couldn’t have gotten if you weren’t there.

The shooting near the Empire State Building today demonstrated in yet more ways how news will arrive without mediation.

On Twitter, some objected to my linking to photos from the scene taken by witnesses immediately after the crime, without warning of their graphic nature. The murder victim lay in his blood, so bright red that someone else on Twitter wondered whether the image had been doctored. No, we’re simply not accustomed to seeing so much blood so fresh. We have waited until news photographers arrived, until after the bodies have been taken away, replaced by chalk outlines behind yellow ribbons with only dried, brown-red stains remaining. We are used to seeing the sometimes ugly world packaged and sanitized for our protection by media.

So it’s doubly shocking, perhaps, when media now shows such images from those witnesses.

Jim Romenesko asked The Times about running that photo on its home page, albeit briefly, and they gave what I’d call a right answer: “It is an extremely graphic image and we understand why many people found it jarring. Our editorial judgment is that it is a newsworthy photograph that shows the result and impact of a public act of violence.”

I say it is a good thing that we see a more unvarnished world. Perhaps then we’ll have a real debate about guns the way we were forced to face Vietnam through scenes of death on the evening news, as some of my defenders on Twitter pointed out. “Death by gunshot is graphic. Now uncontainable,” said the Guardian’s Charles Arthur (though the Guardian tried to contain it)

I also say that in any case, we’d best get used to it, for as we all well know, news and images of it won’t come from reporters and credentialed photographers first and won’t be filtered through media before it comes to us. It is coming from witnesses who go by names like @yoassman [the name and a Seinfeld tribute, no doubt] and Mr. Mookie, who may write indelicate comments like, “They shoot, aw made you look. No really tho. Dude got popped!” and “Why yall keep saying it could be someone I know? I don’t have anymore room for RIP tatts on my arm. I’ve seen my friends with they heads blown off in the street. Yea it happens to me too and I get over it. Its life.”

Yeah, welcome to life. Most such life isn’t reported with such a splash because it doesn’t happen in such a public place. It happens in the Bronx or 19 times in a weekend in Chicago.

I think we’ve become much too accustomed to mediated news, to a world sanitized for our protection. That’s what makes people ask for warnings before being shown reality, even if the discussion is about murder, and even if they had to click on a link to see what I was writing about. They had to be curious enough to do that. But they weren’t curious enough to see news as it really happened. The image didn’t come into their homes on a TV screen with kids on the couch. It came through my Twitter feed. It was insensitive of me to link to it without warning, I was told. No, I think the problem is that media have made us insensitive — desensitized would be the cliché — to such a fact.

Don’t tell me you’re offended by murder. If you weren’t, that would be the problem. Of course, you are. So don’t tell me not to offend you with what it looks like once you click. And don’t tell me what to say and what not to say.

A man was killed in New York this morning. Now we know better what that looks like. That is news.

:Later: On the Media tells the story of that photo on The Times homepage. And here’s Poynter on the photo.